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33 J. Consumer Pol'y 1 (2010)

handle is hein.journals/jrncpy33 and id is 1 raw text is: J Consum Policy (2010) 33:1 27
DOI 10.1007/s10603-009-9120-y
A European Perspective on Consumer Loans
and the Role of Credit Registries: the Need to Reconcile
Data Protection, Risk Management, Efficiency,
Over-indebtedness, and a Better Prudential Supervision
of the Financial System
Federico Ferretti
Received: 21 August 2009 /Accepted: 14 December 2009 /
Published online: 13 January 2010
C Springer Science+Business Media, LLC. 2010
Abstract The paper examines the role of credit registries in the context of European
consumer credit markets and the current policies of the EU in this area. It attempts to show
the institutional challenges relating to some competing rights or interests amongst
consumers and financial institutions and the need for a strengthened prudential supervision
of the financial system as evidenced by the recent crisis whose effects have spread into the
global economy. In particular, it shows that there is a conflict between the right to data
protection of consumers, the risk management interests of lenders, and the prudential
supervision of the credit system. The ultimate goal, thus, is to present some weaknesses of
the current arrangements and to put forward a proposal that is probably controversial but
that is intended to stimulate a debate from an alternative policy perspective that is wider
than the current one.
Keywords Consumer credit - Credit data - Institutions - Data protection-
Consumer credit reporting has become the instrument most extensively used by lenders to
underwrite decisions on borrowings or the supply of goods and/or services to consumer
customers. Lenders, in fact, access credit reference databases managed by third-party
providers (credit registries) in order to evaluate a consumer's credit application and his or
her creditworthiness. They provide to the credit industry and the market organized
information on the performance of consumer borrowers, gathering information on their
payment history and accounts and issuing a credit report prior to the underwriting of a loan
or the supply of goods and/or services.
F. Ferretti (E)
Brunel Law School, Brunel University, London, UK
e-mail: federico.ferretti(albrunel.ac.uk

4_ Springer

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